AIGCAF Funds $65MM Loan to Upstate Transmission Holdings

AIG Commercial Asset Finance (AIGCAF) and its affiliates have provided a $65 million senior secured term loan to Upstate Transmission Holdings. The loan was provided for recapitalization of Upstate and is secured by a 65 mile high-voltage transmission line that is on long-term lease by Upstate to Niagara Mohawk Power Corporation (Niagara Mohawk). The line is an integral part of the New York State transmission grid that connects over 4,500 megawatts of base load generation near Lake Oswego in western New York State to the rest of Niagara Mohawk’s grid.

AIGCAF said its expertise and understanding of the customer’s objectives in financing long-lived assets played a key role in AIGCAF being chosen as a financing source. Dan Revers, managing partner of ArcLight Capital Partners commented, “We are pleased with the outcome of our recent financing with AIGCAF. We look forward to building upon our relationship with AIGCAF.”

Upstate is an affiliate of ArcLight, a Boston-based manager of five energy infrastructure funds. ArcLight was established in 2001 and currently manages $10 billion in investments across the entire energy industry value chain including coal, oil and gas production, midstream, power generation, gas and electric transmission and distribution as well as related service businesses.

Kirk Phillips, senior vice president of Direct Originations at AIGCAF, noted that the company’s extensive experience in equipment finance, structured finance and leverage leasing contributed to closing this relatively complex transaction. “After working closely with the customer to understand their objectives, AIGCAF’s structuring, credit and legal teams worked diligently to deliver a solution that met AIG’s investment criteria and the client’s borrowing needs,” he said.